Crypto Exchanges Are in Trouble, Diversification is Important. Coinigy Can Help.
Popular multi-exchange trading platform Coinigy has analyzed internal data and uncovered some interesting insights on the lifespan of cryptocurrency exchanges. The data shows that of all tracked exchanges that have gone bust, the average lifespan is less than 3 years. This information, which is particularly relevant in light of the recent FTX, Voyager, Celsius, and Genesis failures, highlights the importance of diversifying your crypto portfolio across several exchanges and being aware of potential risks when deciding where to custody your funds.
Out of the 90+ exchanges that Coinigy has listed since 2014, more than half have shut down or gone out of business. Only a select few have stood the test of time, lasting longer than 2,500 days. Some of these stalwarts include Coinbase, Bitstamp, Bitfinex, Kraken, Bittrex, and Poloniex. But for the majority of exchanges, the story is grim — with an average lifespan of just 1,077 days. On the low end, there are numerous exchanges, including BitYes, Yunbi, and LZF that were listed for less than 100 days.
By contrast, Coinigy is in its 9th year of operation, proving a robust multi-exchange trading platform that has stood the test of time.
“The ongoing Exchange shake out emphasizes the need to diversify your portfolio across multiple exchanges,” noted William Kehl, SVP at Coinigy. “Keeping all your eggs in a single basket is not a great long-term plan, especially in the crypto world, where exchange turnover is the norm, rather than the exception.”
Exchanges close due to a variety of reasons, including poor or nonexistent risk practices, lack of adoption, poor management, lack of liquidity, hacking or security breaches, and regulatory issues.
FTX in particular was listed on Coinigy for only 195 days prior to its’ epic fall. It’s worth noting that the majority of these delisted exchanges, like BTC-e, Mt.Gox, and BTC China, are older and had already closed down pre-pandemic. Nonetheless, there are plenty of new, untested exchanges popping up every day and Kehl recommends new traders proceed with caution. “We highly recommend you don’t FOMO into new exchanges based on a single tweet or social media presence, “ he continues. “…a multi-exchange platform like Coinigy can allow you to test the waters, allowing you time to explore trading with a new exchange on the same platform that you are used to, giving you time to make an informed decision.”
Coinigy offers a wide range of tools for crypto traders including Tradingview charting tools, price and volume alerts, a real-time crypto screener, and state-of-the-art portfolio monitoring is part of the Coinigy offering.
One of the key features is its ability to connect to multiple exchanges, allowing traders access to a wide swath of markets and assets from a single platform. This eliminates the need to constantly switch between different exchange websites and reduces the risk of missing out on important market movements. Additionally, it can be used to discover new exchanges and evaluate them based on their historical performance and other important metrics. Overall, Coinigy offers a proven, comprehensive, and user-friendly solution that can help traders to stay informed, make better decisions, and manage their assets more efficiently.
Traders interested in a demo of the Coinigy platform can sign up for free at www.coinigy.com.